I. “Farmers unable to cash in on soaring food prices“, Los Angeles Times (13 May 2008) — More evidence that food prices are rising in part due to inflation. To anyone familar with either history or economics, this screams “inflation.” And just as typical of early stage inflation, neither the people interviewed or the journalist see it. Excerpt:

All over the world, prices for basic foods — barley for beer, milk for cheese, corn for tortillas, and the rice that serves as a staple for more than half the world’s population — are soaring. But farmers aren’t rushing to cash in on the boom by planting more of the crops. The amount of corn planted in the U.S. is expected to dip this year. Rice acreage in California, which sells as much as half its crop overseas, is predicted to increase by only a small amount. Instead, farmers are planting cheaper-to-grow wheat and soy. They say the reason is simple. The cost of planting some crops is rising as fast as their prices, and sometimes faster, leaving little incentive to increase production of some foods that remain in high demand around the world.

… The cost of farming an acre of corn, for example, has risen almost 47% over the last year, according to Wells Fargo & Co. estimates, outpacing the 35% increase in the price of corn in the same period.

… Charlie Hoppin, who farms 3,200 acres scattered across Yolo and Sutter counties, is one farmer opting for a crop other than corn. He figures that safflower will be just as profitable, if not better, and a whole lot easier to farm. At today’s prices, corn brings in roughly $1,200 an acre. Safflower will bring in $750. But fertilizer is less than half the cost, the seed is less and I won’t need the same irrigation or pesticides,” Hoppin said.

… One problem for all farmers: the rising cost of fertilizer, which has nearly doubled in the last year, according to the Department of Agriculture…. The price of the diesel fuel that is used to run combines and tractors has jumped by half from a year ago, according to the USDA. Seed prices have risen more than 25% from last year, the USDA said.

Farmers are also dealing with higher rents, as landowners demand their slice of increased food prices. Indeed, the rent for some of Osterkamp’s land has jumped to $250 an acre this year, up from $175 a year ago.

Climate change, reduced availability of land for agriculture, growing populations in the poorest parts of the world, increased demand from a growing middle class in China and India, rising fuel costs and development of biofuels are among the reasons cited for food shortages and high prices. This two-part YaleGlobal series explores the phenomenon that has been anticipated by global experts in recent years and also offers recommendations.

In the first article, C. Peter Timmer explains that hoarding and speculation have exacerbated the shortages in the short term. Rice shortages and prices have been especially volatile, with some major exporting nations like India and Vietnam putting export bans in place. Speculative investment of billions of dollars in food crops further spurs the price rise. Food panics are not new, but no quick fix is in sight with reduced high-yield agricultural land and increasing costs for water and fuel. Unless governments take action to minimize trade disruptions, market instability promises high prices of food for the foreseeable future.

The temptation is great to find a quick fix for the shortages and high prices associated with the global food crisis. Indeed, radical changes are needed in how the world produces and distributes food, otherwise substantial numbers will go hungry later this century. That is the grim conclusion of an international report initiated by the World Bank and the UN Food and Agricultural Organization. Drawing on the work of 400 experts, the report describes how industrial farming boosts agricultural yields in the short term, but leads to the long-term destruction of land.

This two-part series suggests that attempts at quick fixes could exacerbate the problems, and in the second article, author Mira Kamdar examines India as a case study: The nation adds 18 million new mouths, the equivalent of the Australian population, to its ranks every year, and agriculture cannot keep pace. Pollution from fertilizers and pesticides, water shortages, higher prices for seeds and fuel add to farmers’ challenges. Transnational corporations encourage intensive industrial agriculture, but Kamdar argues this is the wrong direction for India and other nations confronting hunger problems. Instead, she urges restoration of degraded land and water supplies and adopting agricultural practices that promote sustainable agriculture. Kamdar concludes that regarding agriculture as simply a business for making profits, while neglecting its social or environmental contributions, is a dangerous mistake.

World market prices for major food commodities such as grains and vegetable oils have risen sharply to historic highs of more than 60 percent above levels just 2 years ago. Many factors have contributed to the runup in food commodity prices. Some factors reflect trends of slower growth in production and more rapid growth in demand, which have contributed to a tightening of world balances of grains and oilseeds over the last decade. Recent factors that have further tightened world markets and added to global food commodity price inflation include

increased global demand for biofuels feedstocks

adverse weather conditions in 2006 and 2007 in some major grain and oilseed producing areas

the declining value of the U.S. dollar

rising energy prices, increasing agricultural costs of production

growing foreign exchange holdings by major food importing countries

policies adopted recently by some exporting and importing countries to mitigate their own food price inflation.

Cheap food, in these books, is the enemy. Roberts complains that “the attributes of food that our economic system tends to value and to encourage”-like cheapness-“aren’t necessarily the attributes that work best for the people eating the food, or the culture in which that food is consumed, or the environment in which it is produced.”

Cheap food distresses Raj Patel, too. Patel, a former U.N. consultant and a current anti-globalization activist, is an excitable fan of peasant coöperatives and Slow Food. He lacks Roberts’s cool scope but shares his ambition to connect all the dots. Patel would like us to take lessons in “culinary sensuousness” from his “dear friend” Marco Flavio Marinucci, a San Francisco-based artist and, apparently, a master of the art of “gastronomical foreplay.” Patel regrets that most of us are nothing like dear Mr. Marinucci. We are all too busy being screwed over by the giant corporations to take the time to appreciate “the deeper and subtler pleasures of food.” For Patel, it is a short step from Western consumers “engorged and intoxicated” with cheap processed food to Mexican and Indian farmers committing suicide because they can’t make a living. The “food industry’s pabulum” makes us all cogs in an evil machine.

It’s easy to see what Roberts and Patel have against cheap food. For one thing, it’s often disgusting. Roberts has a powerful passage on industrial chicken, showing how its vile flesh is a direct consequence of its status as economic commodity.

… Pollan offers a model of how individual consumers might adjust their appetites: “Eat food. Not too much. Mostly plants.” As a solution, this is charmingly modest, but it is unlikely to be enough to meet the urgency of the situation. How do you get the whole of America-the whole of the world-to eat more like Michael Pollan?

The good news is that one developing country has, in the past two decades, conducted a national experiment in a more sustainable food system, proving that it is possible to feed a population less destructively. Farmers gave up synthetic fertilizers and pesticides and replaced them with old-fashioned crop rotations and mixed livestock-crop operations. Big industrial farms were split into smaller coöperatives.

The bad news is that the country is Cuba, which was forced to make the switch after the fall of the Soviet Union left it without supplies of agrochemicals. Cuba’s experiment depended on its authoritarian state, which commanded the “reallocation” of labor from cities to farms. Even on Cuba’s own terms, the experiment hasn’t been perfect. On May Day, Raúl Castro announced further radical changes to the farm system in order to reduce reliance on imports.

Paul Roberts notes that there is no chance that Americans and Europeans will voluntarily adopt a Cuban model of food production. (You don’t say.) He adds, however, that “the real question is no longer what a rich country would do voluntarily but what it might do if its other options were worse.”

One thought on “Weekend reading about the Food Crisis”

Interesting! I too think it’s still up to us to go back to “culinary sensuousness”. As rice is the staple food in my country, and our production was recently reported decent this year, I still worry about next year (s). Very vulnerable system that may cough in case of weather hazards we have here in Madagascar. Bookmarked your blog.

Regards from Madagascar
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.Fabius Maximus replies: Thank you for commenting! Viewpoints from other nations are esp. valuable!